July 9, 2005
An Apple phone company?
Steve Jobs might be planning to launch an Apple phone company, writes Forbes (via melablog.)
Apple is already developing an iPod/cell phone with Motorola. And companies like the Virgin Group and Disney are proving that a new network model can allow all kinds of businesses to easily enter the mobile market.
The launch of Disney Mobile won't require an extensive deployment of infrastructure and cell towers, since all the calls will go over Sprint's network. So Disney will gain access to a dedicated, direct marketing channel to kids, benefiting from network revenue and from selling its content in a new medium.
This "mobile virtual network operator" model, or MVNO, might be tempting for other companies with strong brands, like Nike and Wal-Mart Stores.
The leap to wireless could be easier for Apple, since it already specializes in making handheld gadgets, like iPod. With each new generation of the devices, Apple has added features like more memory and color screens. It makes sense that the company would want to merge two devices already in consumers' pockets: a cell phone and a music player.
But carriers will probably be loath to sell and support it, since they want to sell their own music downloads--not have customers upload tunes from home. The solution could be for Apple to launch its own cellular network.
"You could certainly see Apple emerge as an MVNO, and then they could control how the phone works," says analyst Rob Enderle.
If Apple launched their own virtual network, they could even tie it in to their iTunes Music Store. This would allow them to obtain more revenue from the direct sale and download of digital music to phone handsets.
Whatever Apple does, it's likely that more MVNOs will materialize this year. "We're going to see much more of these," says Enderle. "It's very profitable for the carriers. Virgin has been very successful with it, and it reduces customer acquisition costs very substantially."
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